Bitcoin’s latest downturn may have less to do with crypto-specific factors and more to do with the global liquidity cycle, according to analyst Jamie Coutts CMT, who warned that market conditions will remain volatile until the U.S. dollar “starts behaving.”
Dollar Strength = Liquidity Stress for Crypto
Coutts highlighted that Bitcoin remains tightly correlated with the dollar because the dollar acts as a real-time gauge of global liquidity. When the dollar strengthens, liquidity tightens, and risk assets like Bitcoin feel the impact almost immediately.
His chart shows the long-standing inverse relationship:
- •Bitcoin struggles when the dollar rises
- •Bitcoin rallies when the dollar weakens
The recent spike in the Dollar Index (in inverse terms) aligns with Bitcoin’s sharp pullback, reinforcing that macro forces are dominating crypto price action.
Until the dollar starts behaving — which is ultimately a function of liquidity — conditions will stay rough. Bitcoin and crypto remain tightly correlated with the dollar because it acts as a real-time liquidity gauge.
Right now, the market is saying: whatever the central… pic.twitter.com/hdK5uxLXVs
— Jamie Coutts CMT (@Jamie1Coutts) November 19, 2025
Market Signaling That Fed Measures Aren’t Enough
Coutts notes that the market is effectively rejecting current policy tools, such as rate-cut expectations, temporary liquidity facilities, and capital-relief measures, signaling that they fall short of restoring easy financial conditions.
“Whatever the central planners have in mind… it won’t be enough,” he wrote.
This echoes broader market sentiment that risk assets won’t stabilize until clearer evidence of easing dollar liquidity emerges.
“The Market Always Forces the Hand of the Fed”
Coutts argues that financial markets ultimately dictate the timing of policy shifts, not policymakers themselves. When liquidity tightens too far, markets pressure the Fed and Treasury into action.
His closing note, “The Spice Must Flow”, underscores the core message: Liquidity drives everything. Until it returns, volatility stays.